Despite the records: the European Union will allocate the largest aid package to Moldova

The European Parliament has supported the allocation of a record €1.9 billion aid package to Moldova. The money will be received within three years, most of it in the form of loans. The government of the country says that large-scale assistance will make it possible to carry out economic reforms and raise living standards. The opposition believes that officials are simply stealing funds. Izvestia investigated the situation.

In a deep trench

The European Parliament has supported the allocation of a record €1.9 billion aid package to Moldova. 499 deputies voted in favor, 117 opposed, and 44 abstained. Now the agreement must be approved by the European Council, then the document will be published in the official journal of the EU, then it will enter into force.

Photo: Global Look Press/Karl-Josef Hildenbrand

It is known that as part of the assistance program, Moldova will receive €520 million in grants, the remaining 1.4 billion will be loans, meaning they will have to be returned over time. Chisinau will receive the first tranche of €315 million at the end of April, then the money will be transferred twice a year.

It is assumed that the funds will be used to accelerate socio-economic development, promote European integration and strengthen Moldova's security. At the same time, the discussion of the issue turned out to be quite heated. For example, Romanian MEP Siegfried Mureshan said that Chisinau's support meets the long-term interests of the EU, because Moldova allegedly became a country with European values.

View of the square of the Cathedral in Chisinau

Photo: TASS

Estonian parliamentarian Sven Mikser said that the EU should help Chisinau to assume the obligations of an EU member state as soon as possible. "Our actions are urgent. Last year, we proposed the creation of an aid fund based on the Western Balkans model. Since then, many events have taken place that have complicated the political and economic situation in Moldova," he said.

In turn, French MEP Julien Sanchez stressed that he opposes the provision of aid and Moldova's admission to the EU, because the country will not be able to become a budget donor, but will only "worsen the disaster." His German counterpart Alexander Sell called Moldova's aid a waste, because Moldova is a corrupt country, and €1.9 billion will end up in the pockets of the oligarchs.

"This is a step towards enslavement"

Moldovan economists note that the exact conditions for receiving European aid are still unknown. At the same time, the country usually received previous loans at an annual rate of 3% with a maturity of 20-25 years. Simple calculations show that in the end, about €1 billion in interest will have to be paid for a loan of €1.4 billion. "This is without taking into account the additional costs that may arise due to fluctuations in exchange rates or unforeseen fees," the Moldovan Vedomosti newspaper says in an article.

The situation with the grant is also difficult. This money is not required to be returned, but the European Union usually transfers funds with a number of conditions. As a rule, we are talking either about raising tariffs for housing and communal services for the population, or raising the retirement age, or making political decisions concerning, for example, the protection of minority rights. Last fall, a heated discussion broke out about opening the Moldovan land market to foreigners. In any case, the European grant of €520 million will also have its price for Moldova.

In such circumstances, the Moldovan opposition strongly opposed receiving assistance from Brussels. For example, former president and leader of the Party of Socialists Igor Dodon said that the country would fall into a debt trap. "This is not help, but another step towards enslavement. Instead of real development, the current government agrees to conditions that condemn future generations to pay huge sums," he stressed.

Former Prime Minister Vladimir Filat said that in four years, the current Moldovan authorities have already accumulated debts of €2.7 billion. "What did this money go to? Do we have a Western-level infrastructure now, has there been some kind of development leap? On the contrary, we are witnessing a threatening increase in poverty, insane prices and an economy that is barely breathing," he said, adding that the country is already paying 200 million euros annually on previously borrowed loans.

In response, the Moldovan authorities promise to spend money carefully and precisely. Thus, Prime Minister Dorin Rechan says that a detailed plan for the allocation of funds will be ready in April. According to him, the priority will be to repair roads, modernize schools and create industrial zones that will attract new businesses and jobs. "These days, we are discussing our growth plan with the Director General of the Directorate General for Neighborhood Affairs, Gert Jan Koopman," he noted.

In turn, the speaker of the Moldovan parliament, Igor Grosu, accused the opposition of not wanting development, but the degradation of the country. "Projects in our villages are funded by the EU and its member states, as well as other Western partners, as can be seen with the naked eye by any resident. But Dodon doesn't need all this. Why? Very simply, he wants Moldova to remain poor and undeveloped, because such a country is easier to control," he said.

In reality, it seems that the allocation of record aid is related to the upcoming parliamentary elections to be held in Moldova in the next six months. Last year, the presidential campaign was held in the country, and Maya Sandu, who is convenient for Europeans, won with great difficulty. The parliamentary elections will be more important because it is the legislature that determines the fundamentals of foreign and domestic policy, and money from the EU should probably help the authorities work with voters.

In principle, the European Parliament does not hide its goals. For example, Romanian MEP Siegfried Mureshan warned that Moldova would lose 1.9 billion in aid if anti-European forces won the elections. "If an anti-European government comes to power by an absurd combination of circumstances, everything achieved may be lost. As [the Prime Minister] Viktor Orban in Hungary, attacking the European Union, lost €20 billion from European funds, the same thing can happen in Chisinau," he stressed.

What the experts say

Moldovan political scientist Alexander Korinenko links the allocation of money to the upcoming parliamentary elections.

— The Europeans are almost directly telling our voters: if you want to receive these promised funds, keep the pro—Western PAS party in power. EU Ambassador Janis Mažeix stressed that if Moldovans make the "wrong choice", the process of European integration will be suspended. On the other hand, it is also a good incentive for Maya Sandu's team to actively fight for power. If they win, these people will not only remain at the helm, but will also be able to distribute large amounts of money," he explains.

Igor Shornikov, an associate professor at the Financial University under the Government of Russia and former Deputy Foreign Minister of Pridnestrovie, says that the European Union has two main goals.

— First of all, we are talking about preserving the current Moldovan regime. Maya Sandu's team needs money for the election campaign, and it is also necessary to replace the funds that have stopped coming from USAID for working with public opinion and the functioning of pro-Western media. Secondly, Moldova continues to be prepared for a hypothetical war, it has its place in the global European rearmament plan for € 800 billion, which was recently announced," he explains.